Coal power plant expansion challenged in court

CALGARY — Environmental groups opposed to a coal power plant expansion in western Alberta have launched court action against the provincial utilities regulator and the local proponent, arguing approval of the project was fast-tracked so it could skirt forthcoming federal coal rules.

The Pembina Institute, backed by the environmental legal advisory organization Ecojustice, is seeking to appeal the Alberta Utilities Commission’s June 30 interim approval of Maxim Power Corp.’s 500-megawatt Milner expansion near Grande Cache.

The Calgary-based organization, which previously sought a public hearing on the coal project as an intervener but was denied, filed a notice on July 28 with the Alberta Court of Appeal advising it would state its case for launching a formal appeal on Sept. 15.

Chris Severson-Baker, managing director of Pembina, said the regulator erred in law and did not make a decision in the public interest when it approved the Milner project without a hearing or conditions just over three weeks after Maxim had penned a letter requesting a speedy ruling.

“Our concern is the coal regulations would be undermined even before they’re introduced,” Severson-Baker said.

“Coal-fired power plants are big, huge sources of pollution. They operate for 45 years so they have local, regional and global impact.”

The $1.7-billion Milner project would use so-called supercritical technology — today’s industry standard — which allows for 20 per less emissions than older coal plants such as Maxim’s existing 150-megawatt facility near Grande Cache.

The three million tonnes of greenhouse gases the expansion would produce per year would far exceed emissions of a plant with carbon capture and storage, expected to be the standard under federal rules to take effect in 2015 — anticipated since first discussed by Ottawa last summer but yet to be released.

New coal facilities are expected to perform like high-efficiency natural gas power plants, the same as a typical coal plant trapping 70 per cent of emissions through carbon capture and storage.

Maxim started planning for its expansion in 2005 and first sought approval from the Alberta Utilities Commission in 2009.

The Pembina Institute had requested a public hearing but was not considered to have standing, the test being whether an intervener is directly or adversely affected by a proposed project.

In a June 7 letter to the Alberta Utilities Commission, Maxim argued the regulator should not hold a hearing on its own accord and instead rule on the Milner expansion by June 30, allowing Maxim to make a timely investment decision.

“The delay of a hearing would kill the project,” the company wrote, citing its “extreme concern” over new federal greenhouse gas emission rules.

The firm noted its assurances by federal Environment Minister Peter Kent that the Milner expansion would be considered an “existing project” if commissioned by July 1, 2015.

Existing units wouldn’t be subject to the performance standard until end of life, the longer of 45 years from commissioning or the expiry of the power purchase agreement in effect when the policy is announced.

Environment Canada, which did not immediately respond to a request for comment Tuesday, previously told the Herald companies and provinces were briefed May 26 on proposed rules but a spokesman would not address the assurances cited in Maxim’s letter.

Alberta Utilities Commission spokesman Jim Law said the regulator has not filed a court response to Pembina’s action and argued the commission did not expedite Maxim’s application.

“All things being equal, there was no reason we shouldn’t issue the decision in a timely way and so we did,” Law said.

“But the decision is interim, so Maxim takes the risk as they proceed, that there might be significant conditions attached to it.”

A spokeswoman for Maxim president and CEO John Bobenek said the executive would not comment on the legal action Tuesday because the firm does not discuss matters before the courts.